Portugal GDP Contracts the Most in 4 Years

The Portuguese economy contracted 0.5% on quarter in the first three months of 2025, the biggest decline in four years, following a 1.4% expansion in the previous period and in line with the first estimate.

The contribution of net external demand turned negative, shifting to -0.7 percentage points from +0.7 percentage points.

This change reflects a 0.4% decline in exports of goods and services and a 1% increase in imports.

Meanwhile, the positive contribution from domestic demand decreased to 0.1 percentage points, down from 0.7 points in the previous quarter, driven by a 1.1% decline in private consumption.

On the other hand, investment grew by 3.8%, driven by a positive contribution from inventories amid a stock replenishment effect.

On a year-on-year basis, the Portuguese economy expanded by 1.6% in Q1 2025, slowing from a 2.8% increase in the fourth quarter of 2024, in line with initial estimates.